HomeList – The Business
In the past 12 weeks, we have been working on developing and testing a product to connect people experiencing homelessness to housing options in Austin. These individuals often have various barriers to housing. These can come in the form of prior evictions, legal history, or simply not being able to save for a down payment. HomeList acquires these barriers from its clients and connects them with housing available specifically for them. HomeList achieves this by leveraging both public housing, transitional housing options, as well as a normally hidden list of renters willing to work with people in this situation. We promise, through HomeList, to connect people to stable housing.
Our goal of stable housing comes from an understanding that people are less likely to worry about self-care until they have a stable dwelling, and many people who are living on the street only need a bit of help. These people are normally overlooked because there are other, more vulnerable people who need help sooner. There are unfortunately few options for the less vulnerable population aside from waitlists for case management, and a hope for bootstrapping. The reality of the situation is far from this. The normal waiting period we found from our research participants is close to a year when applying for housing.
HomeList hopes to cultivate increased landlord outreach participation by changing the public perception of what it’s like to house someone who is or has experienced homelessness at some point. Contrary to popular belief, someone off of the street is as likely to be evicted as any other renter. With harsh requirements for background and credit checks, it can be incredibly difficult to get off of the street once there. Renters around the city are coming together to make a change though. They make exceptions for certain barriers to allow these people to have a place to live and stabilize their lives.
To measure our success we will look at the average time people wait for housing before HomeList (from our current research this is around 9 months) compared to the amount of time it takes when HomeList is implemented. Not only does decreasing the time people spend on the street benefit the individual and their lives, but it also saves money for the state or city. Below are two visualizations of what it is like for people who do not qualify for case management to try to get housing when on the street. The first shows the experience without HomeList and the second shows the connection to housing when HomeList has been implemented.
Above you see the disconnection from housing options, and below how HomeList connects directly, and immediately, with the open housing options.
On average, an individual experiencing homelessness costs the state around $14,000. These costs come from healthcare, legal costs, general care for these individuals. Keeping someone housed costs less, estimated at around $12,000 for Austin. Saving $2,000 per year per person amounts to a savings of $3 million if the people currently homeless in Austin were to get housed. Actual costs and savings will vary, as roughly 7000 people experienced homelessness in 2016. By helping people get into housing, HomeList not only allows them to rebuild their lives from a stable home, but also saves money for the organizations who most frequently interface with people currently experiencing homelessness.
HomeList is to be incorporated as a B-Corp to retain the social mission of the product regardless of the company’s controlling party. Our promise is to connect people experiencing homelessness to stable housing. Through outreach to and working with local non-profits and private renters, HomeList serves a part of the population normally forgotten by the systems in place to support them. Instead of working for the benefit of shareholders and investors, being a B-corp allows HomeList to work for its clients above all.
An added benefit is the ability to sell stake in the company or incentivize employees or partners with shares. Our hope is to become a fully self sustaining SAAS company creating a client-side application to better serve the population of individuals experiencing homelessness.
The model below shows the behavior change we hope to see from implementing HomeList. Our most lofty goal is shifting public perception of what an individual experiencing homelessness is. During our research we found negative feelings plague the rental market for these individuals, when they are in fact as likely as anyone else to be evicted or not pay rent. Hopefully HomeList will assist in proving this fact to current renters, and to others who may be interested in social benefit of this type.
For initial development and startup funding, we would originally seek $60,000 in funding to further test our product and create an MVP to deliver our value. The full development cost of our product is $95,000, but our profits in the second year would cover expansion. The development for our MVP would take two months, with a second release scheduled tentatively for a month after the first release. Below is a roadmap of our releases, the dates are not added because they are not concrete. Another avenue considered is partnering with a developer and offering HomeList stock to incentivize their work. This would decrease our need for funding immensely, and would only require minimal input for expenses. Kelsey and I hope to work to implementing a more basic version of our program through text message before releasing a product to help cover development costs with revenue.
For a full release, our timeline is estimated at 60 days, or 12 working weeks for two developers, full time. This is a rough cost of $60,000 for initial development. This release would include full landlord and client side UI, housing program databases, and HMIS server integration as well as e-sign in capability and information storage databases. Later releases will come after our first year, when revenue is expected to begin to cover the cost of development and business. We would then begin to include further functionality beyond matching with housing. It will consider health factors (both mental and physical), job services, and legal help. There are organizations in Austin who provide these services as a social benefit. Matching people with organizations like these after they are housed will help stabilize our clients and further empower them to take control of their lives. Below is an expected roadmap for our releases with what will be released and what order it will be released in. Dates are absent as we do not know when these will take place or when development will be started. Overall the first two releases will take 60 days, the second two coming after our first year of business.
Monetizing HomeList comes in the form of licensing. Currently, HMIS software (Homeless Management Information System) is licensed on a monthly basis. Each organization working for the benefit of individuals experiencing homelessness is required by HUD (the Federal Housing and Urban Development Authority). HomeList is to be sold as an add on to interface with the current HMIS software offerings to make gathering information easier. It is also the only client side application interfacing with HMIS software.
HomeList would be sold to either non-profits directly for $1,500 per month as a flat fee, or to COC organizations for $1,000 per organization using the software. This may seem like a large amount of money for non-profits to cover, but due to the nature of the software, it should qualify from the same HUD subsidy other HMIS softwares are covered by. Normally 75% of the cost is covered by HUD. Other offerings vary from $2,000 – $5,000 monthly depending on the size of the organization for HMIS software. Our is positioned much lower because it does not have the a case manager side UI. Below is a graph showing our profit and loss over 24 months with our current model of funding and development. The graph includes the cost of development for our first three months in operation at $10,000 per month. Our full business plan is available here and our full financial analysis is available here.